Posts Tagged ‘Volvo sale’

Jacoby has worked for a German company in Asia, VW, and an Asian company in Europe, Mitusbishi.

Zhejiang Geely Holding Group Co., Ltd. (“Geely Holding Group”) today announced it has completed the acquisition of 100% of Volvo Car Corporation from Ford Motor Company.

Geely, a privately held company, also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars, replacing Stephen Odell, who returns to Ford to run its European operations. The Jacoby move comes as a blow to VWoA as it is in the process of an ambitious expansion that includes a new plant in Tennessee. Both the VW group and the VW brand in North America are now being run by interim executives.

Completion of the Volvo acquisition, which follows more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu, Chairman of Geely Holding Group and Lewis Booth, Chief Financial Officer at Ford.

The total purchase price for Volvo and related assets from an agreement signed in March 2010 was $1.8 billion, including a $200 million note and the balance in cash. Geely today issued the note and paid $1.3 billion in cash to complete the sale. The estimated purchase price adjustments used at closing are expected to be finalized and settled following purchase price adjustments later this year. The final accounting is expected to result in additional, unspecified, proceeds to Ford, the Dearborn- based company said in a statement. Ford has roughly $27 billion in debt on its books.

Geely issued the note and paid cash for Volvo Cars with financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments for pension obligations and working capital.

This formally ends what has turned out to be for Ford shareholders a very expensive foray into the Swedish car business, which started in 1999 when Ford bought Volvo for $6 billion and Geely was just 13 years old. Billions more were then invested in the loss-making company. Volvo sold about 334,000 cars globally in 2009, 22,000 in China, down from a record 460,000 in 1997. In order to survive Volvo needs to roughly triple current sales. (See Ford Takes Huge Loss on Volvo Sale to Chinese)

Under Chinese ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium.

Ford will not retain any ownership Volvo – from 100% to zero in a little more than a decade. It will supply component parts until the now common Ford-Volvo platforms are phased out by Geely. Volvo was the last vestige of the now defunct Premier Automotive Group, which also included Aston Martin, Jaguar and Land Rover.

“This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets,” said Li Shufu.

自由!

Jacoby will join the board of Volvo Cars, chaired by Li Shufu. The board will comprise several new directors including Hans-Olov Olsson, a former President and Chief Executive of Volvo Cars and a former Chief Marketing Officer of Ford, who will become Vice-Chairman of the board.

China’s Commerce Ministry gave what appears to be the final approval today, according to the Associated Press, which quoted an unnamed government official saying, “This was the final stage. There are no conditions attached.”

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If so, the official transfer of Volvo could happen quickly, ending a decade-long effort by Ford to blend Volvo into its global product development process. The goal yielded mixed results, with Volvo providing some of the basic platforms and safety technology that will continue to be used by Ford in the years ahead. But the Swedish maker itself struggled under Ford’s stewardship and shortly after he joined the U.S. maker, four years ago, CEO Alan Mulally sent a rescue team to Volvo headquarters to try to turn things around – or set the company up for sale.

"We have made significant progress in assembling the team that will develop Volvo Cars under Geely's ownership."

Zhejiang Geely Holding Group Co., Ltd. today announced Li Shufu, its Chairman, will become Chairman of the Board at Volvo Car Corporation upon its acquisition of Volvo from Ford Motor Company.

Geely also named Hans-Olov Olsson as Vice-Chairman at Volvo Cars. Olsson is a former President and Chief Executive Officer of the Swedish automaker. Olsson was an adviser to Geely on the transaction.

How long the 68-year old Olsson will stay in the newly created position is unknown.

Nevertheless, the move is clearly an attempt to assure Swedish doubts about the sale, and ensure a smooth transition from Ford ownership when the deal closes during the third quarter of 2010. Ford will not retain any ownership in the new Chinese company.

“We have made significant progress in assembling the team that will develop Volvo Cars under Geely’s ownership. Today’s board appointments underline my personal commitment to this famous company,” Li Shufu said.

While the difference between U.S. cultural attitudes of Ford management and Swedish attitudes were significant, it is nowhere near as vast as the differences between the Chinese “middle kingdom” and “Konungariket Sverige.” Whether the Chinese can manage to make Volvo a growing and profitable global car company remains to be seen, and is the subject of great debates among industry observers.

中国头号!

For the moment, Volvo production in Gothenburg, Sweden and Ghent, Belgium is secure. It remains to be demonstrated that Geely can successfully build Volvo’s in China to Volvo’s quality and safety standards.

Ford's global marketing chief, Jim Farley, now adds global sales and service responsibilities to his portfolio.

Ford has announced a number of senior management changes that, among other things, will give it a global sales, service and marketing czar, for the first time, and a new boss in Europe.

A one-time rising star at Toyota, 48-year-old Jim Farley has been serving a variety of marketing roles since moving to Michigan three years ago. He is currently group vice president of global marketing, while also running Ford’s operations in Canada, Mexico and South America.

In his new role, Farley drops operational responsibilities but he picks up the added duties of overseeing global sales and service. Effective August 1, it will be the first time a single executive has handled all three operations on a global basis.

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At the same time, Eduardo Serrano, 50, will become executive director of all Ford Latin American operations. He is currently president and CEO of Ford of Mexico. Canadian operations will be handled by David Mondragon, currently president of Ford of Canada.

If there’s any significant surprise in today’s announcement, it’s that Stephen Odell will remain with Ford, taking over as chairman and CEO of Ford of Europe. Since October 2008, the British-born executive had been president of Volvo Cars, the Swedish marque Ford is selling to the Chinese.

More than a $4 billion loss, not including billions more invested in plants and products.

Ford Motor Company today confirmed it has entered into a “definitive agreement” to sell Volvo Car Corporation and related assets to Zhejiang Geely Holding Group Company Limited.

The purchase price for Volvo Cars and related assets – mostly intellectual property – is $1.8 billion, which will be paid with a note for $200 million, and the balance in cash.

Thus ends what has turned out to be for Ford shareholders a very expensive foray into the Swedish car business, which started in 1999 when Ford bought Volvo for $6 billion. Billions more were then invested in the loss making company. Volvo sold about 334,000 cars globally in 2009, 22,000 in China, down from a record 460,000 in 1997.

Ford will not retain any ownership whatsoever in Volvo when the transaction is completed – from 100% to zero in a little more than a decade. Volvo was the last vestige of the now defunct Premier Automotive Group, which also included Aston Martin, Jaguar and Land Rover.

Ford said in a statement that the cash portion of the purchase price would be adjusted at the closing with modifications for pension deficits, debt, cash and working capital, the net effect of which “could be a significant decrease in the cash proceeds” to Ford. (more…)

By the time the 2011 Volvo S60 hits the street, the Swedish automaker will likely be reporting to a new owner -- in China.

Ford Motor Co. officials say they expect to complete the $1.8 billion sale of Volvo to China’s Zhejiang Geely Holding Group Co. “in the next few days.”

Speculation now is the deal could be signed in Sweden as soon as March 28. Chinese Vice President Xi Jinping will be in Sweden this weekend and is scheduled to visit Gothenburg, where Volvo is based.

Volvo and Geely were scheduled to complete the deal in February to coincide with the Chinese New Year but the deal still wasn’t finished in time, with the Asian maker reportedly short of the cash it needed.

Geely, however, has now lined up the financing required and Ford’s lawyers have completed their review of the documents involved in closing the deal.

Ford originally acquired Volvo for $6 billion in 1999. As it turned out, Ford purchased the Swedish carmaker at the very top of the market for automotive assets.

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Volvo never produced the kind of profits required to earn back that investment, and in recent years has been barely treading water, prompting Ford CEO Alan Mulally to peddle Volvo as part of a general house cleaning at the U.S. maker – which had previously sold off the rest of its once-promising Premier Automotive Group.

The announcement comes as General Motors is in the process of closing bankrupt Saab, the other Swedish car company, unless yet another purchaser comes forth, an extremely unlikely prospect during the ongoing Great Recession.

Sales!

If the legal documentation, financing and government approvals are forthcoming as expected, closing of the sale is likely to occur later in 2010, ensuring some sort of survival — at least in name — for part of the foundering Swedish car business.

Ford Motor Company (NYSE: F) announced today that a consortium led by Zhejiang Geely Group Holding Co. Ltd. is its preferred bidder in the ongoing discussions concerning the possible sale of Volvo Car Corporation.

The confirmation comes after almost a year of press speculation that Chinese companies were interested in the loss making Swedish brand.

Ford said that while it will be engaging in more detailed and focused negotiations with Geely, no final decisions have been made.

Tack!

“Ford’s objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties,” said Lewis Booth, Ford Motor Company executive vice president and chief financial officer.